Will COVID-19 kill rural hospitals?
Mid-south facilities were already on life support
Tippah County Hospital is a staple of its namesake county on the Mississippitennessee border. Since it opened in Ripley, Mississippi, in 1950, it has consistently been one of the largest employers in the 22,000-person county and possibly the only institution, besides the county jail, that has been open all day every day for the past 70 years, hospital CEO Patrick Chapman said. “The economic impact is gigantic,” Chapman said. “However, the human impact is immeasurable. Lives are saved here every single day. Tippah County leaders and businesses will tell you very quickly that we cannot survive without our hospital.” The emergency care it offers has been essential over the past several months. Dozens of COVID-19 patients have come through the hospital’s emergency room, Chapman said in May, many needing to be stabilized and transferred to larger hospitals for intensive care. The small county has reported 130 cases – though the true number is likely higher – and 11 deaths as of July 3, according to the Mississippi Department of Health.
As the primary healthcare resource for the county – and neighboring Benton County has no hospital – Tippah County Hospital has been balancing the unique challenges presented by a pandemic alongside declining revenues from canceled elective procedures and declining emergency room visits on top of the ever-worsening financial struggles seen by almost all rural hospitals in the U.S. Chapman praised the hospital’s 240 workers, but acknowledged the toll of COVID-19.
“To put it clearly, the ones routinely on the front lines are exhausted – mentally, physically and emotionally. They are worried about their patients, many of whom they have witnessed succumb. They are concerned about the risk of transmission to their families and communities. Additionally, they are worried whether or not the drop in patient numbers and revenue will necessitate layoffs or furloughs,” Chapman said. “Aside from long hours and the endless donning and doffing of (personal protective equipment), they are fearful that COVID-19 is going to be a marathon and not a sprint. They know very well it is here to stay.”
Rural and urban communities have experienced the pandemic differently, but rural hospitals have suffered severe financial setbacks regardless of the prevalence of the virus in their area. Even as cities and counties continue to reopen and hospitals resume elective procedures, for some, the financial damage is done. As those rural hospitals shut down, residents become stranded in healthcare deserts and small-town economies are decimated, creating a self-sustaining cycle of financial hardship.
Across the Mid-south and down into the Mississippi Delta, rural hospitals have been struggling for decades due to declining rural populations, rates paid to hospitals by private insurers remaining static, even as premiums rise, and the decision by some states not to expand Medicaid. Rural hospitals can vary greatly in size and geographic isolation but are generally defined as those in a nonmetropolitan county, a definition that encompasses about half of the hospitals in the country. One in five Americans depends on a rural hospital as their primary healthcare resource, according to the U.S. Health Resources and Services Administration.
Since 2010, at least 16 rural hospitals have closed in Tennessee, Arkansas and Mississippi, a loss of more than 500 hospital beds, according to the University of North Carolina Rural Health Research Program. Across the country, 19 rural hospitals closed last year alone and 12 have closed since the beginning of the year, including Decatur County General Hospital in Decatur County, Tennessee, which closed on April 15. The closure was due to potential fraudulent practices by the companies managing the hospital, not the pandemic.
At the beginning of the year, there were more than 200 rural hospitals still operating in the three states. According to a report published by national consulting firm Guidehouse in April, 68% of Tennessee’s rural hospitals are at a high risk of closing – more than any other state. In Arkansas, 53% of rural hospitals are at high risk of closure, and 50% of rural hospitals in Mississippi are considered at high risk. The report, based on data from 2019, doesn’t factor in the effects of the pandemic.
All of the hospitals at high risk of closure in the three states are considered essential to their communities, meaning they serve vulnerable, geographically isolated populations and are economic pillars.
‘A perfect storm of damaging financial implications’
In Mississippi and Tennessee, economists, hospital administrators and healthcare policy experts have listed not expanding Medicaid as one of the primary reasons rural hospitals are struggling to survive.
Republicans in the Mississippi state legislature blocked Medicaid expansion proposals in 2013, some citing concerns about increasing healthcare spending and others saying they had not seen evidence that expanding the program would be effective. Tennessee is the first state to propose going to a block-grant funding formula for Medicaid, which has been roundly panned by the healthcare community. That proposal is still awaiting approval from the Centers for Medicare and Medicaid Services.
Timothy H. Moore, president and CEO of the Mississippi Hospital Association, drew a direct line between not expanding Medicaid and those monetary
woes.
“The future of hospitals in north Mississippi are at a critical point,” he said. “Their future and likely the future of the communities they serve will be determined in great part upon whether Mississippi’s leadership makes healthcare a priority and stops playing politics with people’s health.”
Eliot Fishman, senior director of health policy at Families USA, said rural hospitals serve a high number of people who are uninsured. Already thin margins – the result of having a smaller patient pool to absorb the fixed costs of running a hospital – were drawn paperthin as elective procedures vanished during shutdowns. Not all those patients are returning as things open up.
In addition, while having lower COVID-19 spread within a community is undeniably a good thing, it also means even fewer patients coming into hospitals. “They really have now just a perfect storm of damaging financial implications,” Fishman said of rural hospitals. “They are losing people who can put off healthcare, they’re not getting revenue in states without a lot of COVID-19 spread, they’re not getting revenue from that, and they have large numbers of people who are uninsured.”
While it isn’t a panacea, Fishman said rural hospitals are largely faring better in states that expanded Medicaid, where the federal government pays 90% of the cost. Many states cover that remaining 10% by taxing hospitals, making the program revenue-neutral, and sometimes a revenue generator, for the states, he said.
In 2012, Bob Neal, senior economist with the Mississippi Institutions of Higher Learning, conducted an analysis of the potential results of expanding Medicaid in the state. He said recently Medicaid expansion could have cost Mississippi about $350 million – the state general fund budget was $5 billion at the time – but that the state’s Medicaid expenditures were increasing regardless of whether the program was expanded.
“The results of the study showed that increasing expenditures for healthcare in Mississippi would lead to not just more healthcare providers but it would be a boost to the economy,” he said.
The jobs that would be created would pay well above the average wage for the state and those people pay taxes and spend their paychecks locally, Neal said. He said not expanding Medicaid was a significant factor in Mississippi’s rural hospitals’ struggles, but said it would be an oversimplification to tie all of the hospitals’ problems to it.
“Mississippi is one of the poorest states in the nation, has some of the lowest per capita incomes (and) it’s a very rural state,” he said. “People who live in rural areas are typically older, poorer and have more health issues and so having a hospital nearby is very important. But because rural areas are so thinly populated, it makes it difficult for hospitals to remain financially viable.”
Ripple effects
Rural is an omnibus word describing areas as varied as the people who inhabit them. However, rural areas across the country are experiencing similar demographic shifts. By and large, rural populations are getting smaller, poorer and older.
As those trends continue, the balance beam rural hospitals are walking gets thinner and more fall off, setting in motion an economic spiral in the communities left behind.
“Not only are they the best-paying jobs, but they are the community’s largest business, so the people who provide goods and services to those suffer tremendously,” Neal said. “When the hospital closes down, all of the income that was spent in the community from the people who worked there disappears, and that puts an even greater strain on the economy in those rural places. And to add insult to injury it makes it almost possible to recruit new businesses to move in.”
A rural hospital closure impacts almost every facet of a community. The medical professionals who worked there move away to seek new jobs. The coffee shops that fueled their mornings and the diners that fed them lunch start to struggle. Local jurisdictions miss out on tax revenue.
“The loss of jobs and residents has a negative impact on the tax base in the community, shrinking available resources for schools and other public services, potentially affecting jobs in the public sector as well,” said Girmay Berhie, dean of the college of health sciences at Jackson State University.
If the quality of schools and public services declines, it becomes harder to attract new residents and new businesses, making it exceedingly difficult to recover from the financial fallout caused by a hospital closure.
Rural hospital closures also have serious ramifications for the health of the populations they serve. It makes it harder for people to get appointments with specialists, like neurologists and cardiologists – many of whom require referrals from primary care physicians – and for pregnant women to have access to obstetricians, Berhie said.
Local ambulance services get stretched thin transporting emergent patients farther away. That increases the cost of EMS services and keeps them occupied for long periods of time, putting the community at risk should another emergency occur. If the next closest hospital is far enough away, patients’ families need to account for the costs of housing, food and wages lost for time away from work.
Transportation for routine appointments becomes more difficult and expensive, and for people with limited money or mobility, it can become impossible. For people who work in agriculture or manufacturing, taking an entire day off to travel to and from medical appointments is impossible. Behrie said many people simply forgo medical treatment.
“For some, traveling great distances for care can feel like going into a foreign land,” he said.
Changing nature of medicine
Smaller, rural communities tend to be tight-knit. People eat at the same restaurants, shop at the same grocery stores, go to the same churches, attend the same football games on Friday nights and their children go to the same schools. People often know their doctors outside the confines of the hospital. They trust them and are more likely to be honest with them, which any doctor will say is essential to provide quality care. Being integrated into a community the way a rural hospital is can put them in a unique position to be able to render exceptional care, Behrie said. Zach Chandler, executive vice president and chief strategy officer for the Baptist Healthcare System, agreed.
Baptist operates a network of more than 30 hospitals in Tennessee, Mississippi and Arkansas, including in rural counties, and Chandler has worked as an administrator in some of those locations. He said the nature of medicine is changing.
“It’s not just the vital signs. It’s how is their mental health, how is their sleep, what are their finances like, what is their stress level,” he said. “It’s the asking ‘why’ for the guy routinely coming to the ER rather than just stabilizing and sending him back home… you start digging with the why, why, why and you understand people.”
When patients trust their doctors and doctors know more about their patients’ lives outside the examination room, it becomes easier to answer those questions and patients receive better medical care because of it. If more rural hospitals close during or after the pandemic, the hundreds of thousands served by rural hospitals will suffer.
“We are at a situation where a lot of rural hospitals are struggling to survive and they’re critical, they’re important to people in those communities,” Chandler said.
‘It is too small’
Arkansas did expand Medicaid and has seen fewer rural hospital closures than Tennessee and Mississippi in recent years. But its rural hospitals aren’t immune to financial woes, and Jodiane Tritt, executive vice president of the Arkansas Hospital Association, is worried COVID-19 will push some of them over the financial brink.
Across the state, Arkansas hospitals spent $35 million retrofitting hospital rooms and buying supplies to prepare for COVID-19. From March to early June, outpatient visits dropped 35% across the state and emergency room visits dropped about 47%, Tritt said, giving rise to concerns that heart attack and stroke patients are dying at home rather than seeking emergency care.
In March and April alone, Arkansas hospitals lost $271 million in expected revenue. The average Payment Protection Program loan from the Small Business Association received by Arkansas hospitals has been $3 million, she said.
“I think there really is a perception that there is an adequate infusion of dollars from the federal government, and we’re just not seeing that,” Tritt said. “We’re so grateful for the help that we are getting, and you don’t want to complain that it’s too small. But it is too small.”
Rural hospital collapses also increase pressure on larger hospitals in their region, who already receive patients whose needs surpass what a small hospital can provide.
Michael Givens, administrator of St. Bernards Medical Center in Jonesboro, said the St. Bernards system serves 640,000 people across 23 counties in Northeast Arkansas between the hospital in Jonesboro, Crossridge Community Hospital in Wynne, Five Rivers Medical
Center in Pocahontas and Lawrence Memorial Hospital in Walnut Ridge, which is owned by Lawrence County but operated by St. Bernards.
The hospital in Jonesboro has taken in COVID-19 patients from those three smaller hospitals and other rural hospitals across eastern Arkansas that don’t have the ability to handle cases requiring intensive care. Like every other hospital, they had to pause elective procedures and deal with the corresponding drop in revenue.
And the pandemic hasn’t happened in a vacuum. Jonesboro was hit by a tornado in March. There were no fatalities, but there was major property damage in the city and some of the hospital’s staff had their homes destroyed, Givens said.
On top of those challenges, no one knows when the pandemic will end.
“You might see a recurrence in the fall, you might not see a recurrence in the fall,” Givens said. “There’s just a lot of unknowns right now.”
Rural communities continue to wait
That uncertainty may seem even more pronounced for rural communities and hospitals that have not seen the same level of cases, hospitalizations and deaths as metro areas. Rural and urban America have experienced the pandemic differently, said Nick Lewis, CEO of Hardin Medical Center in Savannah, Tennessee.
“For a rural community, as with most, the pandemic created a waiting game. Initial news reports created a state of panic in everyone’s eyes,” he said. “The staff prepared for a potentially overwhelming situation and then, they wait, and wait, and wait. Staff live day-to-day in a hyper-vigilant mode of preparation. It’s stressful and takes a toll.”
Hardin Medical Center had to pause elective procedures despite not having an inpatient COVID-19 case until midmay, Lewis said. As of July 5, there were 108 reported cases and seven deaths in
Hardin County, according to the state health department. As Tennessee continues to reopen, Lewis said he expects an uptick.
“Healthcare providers in major metropolitan communities experienced a vast number of patient deaths over a relatively short period and in unimaginable ways creating an unbelievable nightmare,” Lewis said. “On the other end of the spectrum, rural America stands guard and ready to battle, but still, we wait.”
As they wait, the financial clock continues to tick down, and rural communities continue to wonder how long their financial cornerstones will survive.
Corinne Kennedy is a reporter for The Commercial Appeal. She can be reached via email at Corinne.kennedy@commercialappeal.com or on Twitter @Corinneskennedy